Negotiation is non-negotiable for SMEs

Entrepreneurs don't consider themselves very good negotiators. Well, now's a good time to learn...

Omid Djalili apparently has it spot on in that obnoxious MoneySupermarket ad – we Brits do, in fact, suffer from an over-active cringe gland. At least that’s what a new survey from T-Mobile seems to indicate: according to the results, almost a third of small business owners don’t see themselves as very good negotiators.

Entrepreneurs are generally considered to be well-versed in the art of wheeling and dealing, but it seems the spirit of Del Boy is no more: one in ten businesses say they only try and negotiate on price when they’re having cashflow problems, while 63% say they’d rather walk away from a supplier who has quoted an unreasonable price than negotiate. What’s more, almost 40% of business owners apparently expect suppliers to automatically offer an ‘unreasonably’ high price to start with, while more than 70% think suppliers offer better deals to large enterprises.

Negotiation is a funny old business. Some people love it, a lot of people hate it. But it’s a little surprising to see so many entrepreneurs fall into the latter camp: a third said they feel ‘uncomfortable or stressed’ when they’re negotiating (poor lambs), while 30% say they’d rather turn to a colleague for help in keeping costs down. But for a business owner, it can pay dividends: T-Mobile reports that one company managed to bag itself £1,500 worth of free photography, another saw its rent brought down by £7,000 a year and another persuaded a translation service to drop its price by £36,000. Not bad at all.

Of course, the other thing about negotiation is that it can take a lot of time – and as T-Mobile’s Max Taylor points out, it’s perhaps no wonder SME owners feel they’ve got more important things to be worrying about at the moment. But with the economy likely to remain in the doldrums for a while yet, the question is whether they can afford not to. After all, cash is still king for most business – and negotiation is a great way to hang onto a bit more of your cash. So until things perk up, it could be a choice between ducking out and manning up.